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Can I file a chapter 7 bankruptcy if I live in a house my parents gave me

Roseburg, OR |

My parents gave me a house on their property that was a fixer upper. My name isn't on anything, it all belongs to my parents. I live in the house with my family and my husbands. My husbands family gave us the money to fix up the house. If we file a chp.7 can they come after my parents for us putting money into something that they own even though it was for us? We have receipts to show that it went on the rebuild of the house that we live in. Could this affect my family or his?

Attorney Answers 5

Posted

You need to review with an attorney in your state the concept of resulting trust. In some cases, the property may be deemed yours even though the deed is not in your name. However there may be a homestead exemption to protect it in the event the law deems it yours.
Gifts from family members to help you out should not cause a problem, but again review with an attorney in your neighborhood.

I am not your attorney unless you and I have signed a retainer agreement. What I am saying is not legal advice. Do not act on this information without engaging my services, this is for consideration only.

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Posted

This is a special issue that requires a much closer analysis than we on this forum can give. I suggest you use the Find A Lawyer tab on this website to find a reputable bankruptcy attorney in your area and schedule a consultation.

The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation.

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Posted

First it would be best that you consult an attorney in your state as property rights and interests are generally determined by state law and the protections you may have will likely be based on both federal and state law.
Second, you provide only general information and not enough specific information regarding your financial circumstances to provide a complete opinion.
One recommendation is to have specific information to provide to an attorney to consult about this issue. This would include information about the amount of money that has been expended, the use of credit cards or other debt to make these repairs, and the information above.

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Posted

As I see it, you aren't telling a consistent story. You say that your parents "gave you a house" and then say that "your name isn't on anything." It has got to be one or the other, and it can't be both. When you file for bankruptcy, you need your facts to be accurate & for your story to be consistent, because if you walk into a bankruptcy saying what you just posted, your case will be subject to very close scrutiny, which I am sure will be unwelcome. Hope this perspective helps!

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Posted

The fact that your husband's familly gave you money does not matter if you no longer have it. Since it is a fixer-upper it is likely that the value is within the range of exemption, and if so you could still keep it despite the bankruptcy. But, claiming the homestead exemption could affect the availabillity of other exemptions. If your name isn't on anything, then they really haven't given you anything other than permission to stay there. You may want to enter into a "rent-to-own" deal in which you pay $10 per month plus the property tax and the mortgage if there is one, and then after so many years, they sign the deed over to you and your husband.

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3 comments

Asker

Posted

Is there any reason why my lawyer on the day of going in to sign for a chapter 7 scared us into a chapter 13 instead? We were upfront with our lawyer and he new we had received money for the fixer upper and that we lived on my parents property. He told us that we would be fine to file a chapter 7. Then the day we went to go sign it all changed. The lawyer scared us by saying that they could come after my parents, but didn't give us a reason how or why that could happen. We asked if we could still file a chapter 7 and then switch to a 13 it that happened and he said no. So we said we would file a 13 so my parents would be left out of it. Our name is not on anything that my parents own, they never consigned for anything for us, I didn't give them cash or anything like that, I have receipt to show that we put the money towards lumber, roofing, insulation, ect. Would you suggest a new lawyer. We already paid for the chapter 7 but he wants us to change a doc and sign for chp 13

Robert F Gauss

Robert F Gauss

Posted

Not necessarily. You've stated facts which would make a competent bankruptcy lawyer consider the alternative of Chapter 13 in my opinion. If you're thinking he or she scared you into it for more fees you should sit down with the lawyer and go over the reasons. I would never advise someone against getting a second opinion, but I think there are, or may be, valid reasons to go chapter 13 here. Good luck.

Andrew T. Velonis

Andrew T. Velonis

Posted

Sounds like something scared your lawyer. He may have asked a collegue and gotten further insight. There may be factors here that we just can't know about without acutally looking through your file and doing some work on it. There may be something involving local practice as well.

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